Panamanians go to the polls to vote on canal plan

AFP , PANAMA CITY

Tourists watch container vessels crossing through the Panama canal in Panama City on Saturday.

PHOTO: AP

Voters in Panama went to the polls yesterday to voice their opinion on a US$5.25 billion modernization plan for the Panama Canal that will allow bigger ships to cross between the Pacific and Atlantic Oceans.

The latest opinion polls indicated about 70 percent of voters support the measure.

President Martin Torrijos and the Panama Canal Authority, the government agency that has run the canal since it was handed over to Panama by the US in 1999, insist that the modernization project is vital.

Without it, the 92-year-old waterway would become obsolete after 2012, they argue.

About 80 percent of the GDP of Panama, a country of 3 million people, is linked directly or indirectly to canal activity. Its main users are the US, China and Japan.

Proponents say the canal, through which roughly 4 percent of world trade flows, badly needs an overhaul to accommodate mega-ships and remain competitive against other maritime routes.

It takes just eight to 10 hours to cross the Isthmus of Panama, the tiny middle of the Americas, via the 80km canal. But the actual average time, including the wait, is 26 hours.

The proposed third lane, parallel to the existing two, would accommodate massive post-Panamax vessels 366m in length, 49m wide and with a 15m draft.

Today, such ships -- too wide and too long for the Panama Canal -- must go around Cape Horn at the southern tip of South America to connect to ports on the east and west coasts of the Americas.

If approved, construction is scheduled to begin late next year and expected to be completed in 2014.

On Friday, the last day of the referendum campaign, former president Jorge Illueca and the former canal administrator Fernando Manfredo published a report that criticized the project as costly, unnecessary and risky.

Opponents of the expansion contend that there was no urgent need to undertake such an investment and that instead the country should dedicate itself to fighting poverty, which affects 40 percent of the population.

But the government sees the canal as a means to combat it.

"To fight poverty requires resources, and the natural resource that Panama has is its geographic position, and what we are doing is exploiting this natural resource to put it at the service of development to reduce or eradicate those intolerable poverty indicators and the unequal distribution of wealth," Samuel Lewis, the vice president and foreign minister, told reporters.

Panama plans US$800 million in investments this year, a significant part of them in the social sector. Of that amount, US$600 million was generated by the canal.

Torrijos said on Friday that the weekend referendum "was a date with the nation."

"The canal is and will be a vital part in development, and plays a fundamental role in the growth of world trade," he told Canal 4 TV.

The US is by far the biggest user of the waterway with 138 million tonnes of cargo coming from and going there, followed by China with 36 million and Japan with 33 million, according to the Panama Canal Authority.

The government says the work would be financed by a hike in tolls, worth US$1.2 billion last year.